Simplifying business regulations could unleash the potential of the private sector, particularly the small and micro businesses which are important contributors and beneficiaries of inclusive growth.
Business regulations also contribute to large scale informality which prevents a country from creating more and better jobs that could reduce poverty at a faster rate.
In a briefing last week, World Bank Philippine office senior country economist Karl Kendrick Chua said business regulations in the Philippines tend to be cumbersome and limit the growth of innovative entrepreneurship and investments.
“Indicative estimates suggest the high cost of doing business is clearly a toll on the country’s inclusive growth agenda. We don’t have exact numbers, but if we have simpler regulations, we are seeing anywhere from at least P5 billion to P10 billion in new investments that can come in,” Chua said.
“They not only have to pay legitimate fees between P21,000 to P45,000 a year when they open a business, they also spend a considerable amount of time moving from one agency to another, and waiting in line to process their documents, often resulting in significant loss of productive time and income. In some instances, businesses report they need to pay bribes to obtain various permits and licenses,” Chua said.